Comments
Real estate developer DLF Ltd plans to raise around ₹2,000 crore ($240 million) through the issue of non-convertible debentures, sources said.
The sources said that the money raised would be most likely be used for the acquisition of the distressed bonds of a developer in Gurugram, who has defaulted on loans taken from Standard Chartered Bank, BD International and Deutsche Investments, to whom the debentures were issued. The debt securities, with a face value of ₹600 crore are secured against a 72-acre land parcel, belonging to the developer and affiliates. DLF company plans to acquire 29 acres in the city, of which 25 acres are part of the mortgaged land.
DLF did not respond to an email seeking clarification.
The company has signed an agreement to acquire the bonds at a negotiated price of ₹825 crore, at a 30 per cent haircut, and assume the rights of the bond holder and also get possession of the land. Another ₹1,000 crore would be required to settle up other liabilities to the landholders as well as buying floor space index from the government.
The land to be acquired has a development potential of 7.5 million square feet and ₹15,000 crore gross development value. The land parcel is situated on Golf Course Extension Road in Gurugram. It is also planning to acquire rights and interests on the remaining portion of the mortgaged land through separate agreements. The entire process is expected to take up to a year.
Exchange filing
In an exchange filing last week the company had said that it is purchasing the bonds “as a strategic investment and would be looking at rights under the bonds documentation including enforcement, settlement with the bond issuer including its affiliates,..”.
As the recent third quarter results show DLF has reined in its debt at manageable levels and ended the December quarter with a net cash position of ₹1,246 crore, after paying off dues of ₹75 crore during the quarter. It reported 261 per cent growth in sales at ₹9047 crore, led by Privana, a project in Gurugram, in which the booking amount was raised to a staggering ₹50 lakh.
The demand for its residences has encouraged the company to advance some of the launches in its pipeline. In FY25 it has planned launches of 10 million square feet with a sales potential of ₹32,000 crore.
Its debt instruments have a stable AA rating.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.